Following positive Vaccine news on Monday, investors are already buying into reflation trade ideas. This implies that it won't be long till the global economy bounces back once vaccine distribution starts next year. However, we are still far from having an approved vaccine.
Therefore, US Oil has two narratives to go buy.
In the long run, I'll be looking to buy oil for a recovery to the $51-$55 level.
Therefore, US Oil has two narratives to go buy.
- Vaccine approval happens sometime next month and distribution starts next year. This implies that economic activity will recover fully. This is bullish case for oil.
- Global Oil supply is still high with OPEC members still trying to control oil supply as countries in the northern hemisphere head into winter with further pandemic-induced lockdowns reducing the demand. This is a bearish case for a minor correction.
In the long run, I'll be looking to buy oil for a recovery to the $51-$55 level.
Commentaire:
On Wednesday, OPEC said that weaker-than-expected demand in the US transport sector and lockdowns in Europe will be a drag on demand for crude this year and next.
Commentaire:
Prices may keep edging higher thanks to indications that OPEC members could extend existing production cuts by around three to six months, helping to ease oversupply challenges. But the situation in Europe and the United States is a major overhang.
